The Treasury is putting pressure on Whitehall departments to boost spending on Britain's fraying public infrastructure after figures released yesterday showed capital expenditure by the state down 50% on the Conservative's last year in power.

Officials said the chancellor, Gordon Brown, had put the shortfall in capital expenditure high on the list of priorities for next month's comprehensive spending review after it became clear ministries were failing to spend money allocated to them.

After many years in which government spending on capital projects fell, the Treasury said that one explanation for the unexpected 32% drop in net public investment last year was that departments had become accustomed to "being starved of money". In addition, large parts of the public sector lacked the expertise to run big projects without long delays and spending overruns.

Treasury spending teams have now been told to liaise urgently with spending ministries to draw up plans for quadrupling the sums spent on public investment over the next two years.

Mr Brown had expected the long decline in public investment to end in the last financial year, when after sticking to the plans inherited from the outgoing Conservatives for his first two years, he pencilled in an increase to £5.5bn, followed by a doubling to £11bn by 2001-2002.

Figures from the office for national statistics released yesterday showed that net public expenditure after depreciation actually fell from £3.8bn to £2.6bn in 1999-2000, and was almost £3bn lower than expected.

With the government under mounting pressure from voters to improve public services, departments underspending are being allowed to carry unused parts of their capital budgets forward in the hope that the lost ground can be made up.

The failure of departments to spend all the money available left the government with an even bigger surplus - £18bn - in the public finances last year than it had been en visaging. However, other figures released by the ONS yesterday showed that the weakness of investment was being offset by the strength of consumer demand, which in turn was pushing Britain's balance of payments deeper into the red.

Fresh information provided to the ONS has resulted in the level of consumption being revised up by 1.7% in the first quarter of this year, and for the output of the economy as a whole (gross domestic product) to be 0.6% higher.

The increase in demand coupled with the sluggish performance of manufacturing has prompted a steady deterioration in Britain's trade over the past two years, with the latest data showing that even Britain's traditional strength in services failing to compensate for surging imports of goods.

In the first three months of this year, the current account deficit widened from £1.5bn to £4bn, mainly because the proceeds from Britain's extensive overseas investments returned to more normal levels.

A deficit of £6.6bn in trade in goods was slightly lower than in the fourth quarter of last year, while the surplus in services - which includes the City - was virtually unchanged at £2.5bn.

However, investment income fell from £4.1bn to £900m, while transfers to international institutions fell from £1bn to £800m.